Home prices in San Diego County continued to fall in September, reaching a point last seen in May 2003, according to the most recent Standard & Poor’s/Case-Shiller index released this morning.

The price for a home fell by 26.3 percent compared to the same month a year earlier, and dropped by 34.4 percent from the market peak in November 2005.

The Case-Shiller index assigned a value of 100 to home prices in the year 2000 and has tracked the market’s ascent and descent in relation to that value ever since. By November 2005, the index reached a peak of 250.34, meaning homes measured in the index had appreciated in value by 150 percent in just less than six years.

Now, the index has fallen to 164.12 — that’s a 34 percent drop from the peak, but prices are still about 64 percent higher than they were at the start of the decade.

The economists behind the monthly survey track the sales of detached single-family houses that have sold before in a rolling three month period, contrast them with the price the same house sold for previously, and report the difference as part of the index. Standard & Poor’s also releases a version of the index broken into tiers — taking those sales and dividing them into thirds based on what the previous sale price was.

That means the breakpoints for the tiers change every month. Even the change in the breakpoints tells a story.

August 2007’s index was the first one Case-Shiller released with the tier function. That month, the low tier was homes priced lower than $482,114, the middle tier was between that price and $678,768, and the high tier was anything priced more than the middle tier’s ceiling.

This month, in the index for September 2008, just 13 months later, the low tier comprises homes priced lower than $331,366, the middle tier is between $331,366 and $487,596, and the high tier is anything over that.

Sales at the bottom of the market are hot; sales at the top are cool. (Check out Rich Toscano’s recent analysis of this trend here.)

That said, the lowest-priced tier again saw the most dramatic price decline in the most recent index. Homes in the lowest tier fell 44.3 percent from the tier’s peak in June 2006, and dropped 33.4 percent from the same month a year ago.

The middle tier fell by 34.6 percent from the peak in November 2005 and by 25.4 percent year-over-year.

The high tier fell by 23.9 percent from the peak in June 2006 and by 18 percent year-over-year.

It’s a Thanksgiving-week DataParty and we’ll have more for you later today.

(Update: Here’s an interactive graph with a breakdown of the latest numbers.)


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